DSCR and conventional mortgage at same time

[Amber Seel]

We are in the middle of a cash out DSCR on a property we are BRRRRing scheduled to close 9/28. We also have found another property we would like to offer on for a new primary residence that would be financed conventionally. We will need the cash out from the DSCR to make the purchase on the new primary. Do we have to wait for the DSCR to close and have the proof of funds to make the offer on the new primary? Homes in our area move very quickly and this one will likely be contingent by the time we close on the DSCR.

[Jay Hurst]

Quote from @Amber Seel:

We are in the middle of a cash out DSCR on a property we are BRRRRing scheduled to close 9/28. We also have found another property we would like to offer on for a new primary residence that would be financed conventionally. We will need the cash out from the DSCR to make the purchase on the new primary. Do we have to wait for the DSCR to close and have the proof of funds to make the offer on the new primary? Homes in our area move very quickly and this one will likely be contingent by the time we close on the DSCR.

Yeah, echoing what Patrick said. You will very likely sign a business purpose affidavit at closing of the DSCR loan. This would forbid you to use the proceeds of the cash out for personal use. This is because the DSCR was not underwritten to federal ablty to repay requirements, so it a "business" loan. Plus, if you are closing the DSCR loan in a LLC, that would certainly present an issue trying to avoid liabilty on the "business". (but, you would not be alone 90% of the LLC's I see would not hold up in court and are a waste of time due to how they are used/maintained)